Article by Peter Maass

Ayn Rand Comes to Somalia

The Atlantic  |  May 2001
In the absence of government bureaucracy and foreign aid, business is starting to boom in Mogadishu.

The headquarters of Telecom Somalia is filled with the sights and sounds of Mogadishu-style success. Customers pour through the entrance, funneling past machine-gun positions that flank the front doors. After a pat-down by security guards, who take temporary possession of any guns and knives, they enter the lobby and line up at the appropriate counters to pay their bills or order new service. Clocks on a wall display the time in New York, Paris, London, Sydney, and Karachi—reminders of an outside world that has pretty much left Somalia for dead. Computer keyboards clatter as workers punch in information. Customers chat and argue with one another in a gregarious manner that makes the lobby feel like a town square—all the more so if a goat that’s being herded down the street happens to stray inside.

Telecom Somalia is the largest company in Mogadishu. It has 700 employees, and it offers some of the best and cheapest phone service in Africa. It also provides a clue to the possible resuscitation of the world’s most famous failed state. In 1995, when the international community decided to wash its hands of Somalia and the last United Nations peacekeepers left the country, Mogadishu was a Hobbesian horror show. It remains a miserable and unstable place, a city where taxi drivers ruin their own vehicles, denting the body work and smashing the windows, so that thieves will not bother to steal them. But it is less dismal than it used to be, and better times may be on the way, owing to a new generation of businessmen who are determined to bring the lawless capital back to life.

Prime among the city’s entrepreneurial leaders is Abdulaziz Sheikh, the chief executive of Telecom Somalia. When I visited him last summer, in a small office on the fourth floor of the company’s headquarters, he was being blasted by a hurricane-force air-conditioner that nearly drowned out the constantly ringing phones on his desk. “You need to be here twenty-four hours a day,” he said, explaining that he lives as well as works on the premises. Sheikh had the running-on-fumes look of a campaign chairman in a never-ending race, but at least he appeared to be winning. Anyone can walk into the lobby of his building, plunk down a $100 deposit, and leave with a late-model Nokia that works throughout the city, in valleys as well as on hilltops, at all hours. Caller ID, call waiting, conference calling, and call forwarding are available. There are two other cellular-phone firms in town, and the three recently entered into a joint venture and created the first local Internet-service provider. Not all battles here are resolved by murder.

Mogadishu also has new radio and television stations (one night I watched the Somali equivalent of Larry King Live, in which the moderator and his guest, one of the city’s leading Islamic clerics, fielded questions from callers), along with computer schools and an airport that serves several airlines (although these fly the sorts of airplanes that Americans see only in museums). The city’s Bekara market offers everything from toilet paper, Maalox, and Colgate toothpaste to Viagra, sarongs, blank passports (stolen from the Foreign Ministry a decade ago), and assault rifles. The international delivery company DHL has an office in Mogadishu, where its methods can be unorthodox: if a client has an urgent package that cannot wait for a scheduled flight out of the country, the company will dispatch it on one of the many planes that arrive illegally from Kenya every day bearing khat, a narcotic leaf that is chewed like tobacco but has the effect of cocaine.

Mogadishu has the closest thing to an Ayn Rand-style economy that the world has ever seen—no bureaucracy or regulation at all. The city has had no government since 1991, when the much despised President Mohammed Siad Barre was overthrown; his regime was replaced not by another one but by civil war. The northern regions of Somaliland and Puntland have stabilized under autonomous governments, but southern Somalia, with Mogadishu at its core, has remained a Mad Max zone carved up by warlords for whom fighting seems as necessary as oxygen. The prospect of stability is a curious miracle, not simply because the kind of business development that is happening tends to require the presence of a government, but because the very absence of a government may have helped to nurture an African oddity—a lean and efficient business sector that does not feed at a public trough controlled by corrupt officials.

Similarly, the lack of large-scale (and often corrupting) foreign aid might have benefits as well as drawbacks. Somali investors are making things happen, not waiting for them to happen. For example, on the outskirts of town, on a plot of land the size of several football fields and surrounded by twenty-foot-high walls, workers recently completed a $2 million bottling plant. Everyone refers to it as “the Pepsi factory,” even though Pepsi is not involved. The project’s investors say the plant will become a Pepsi factory: they figure that if they begin producing soft drinks, Pepsi or some other international company will want to get in on the market.

Many of the larger companies in Mogadishu, including the bottling plant, have issued shares, although there is of course no stock exchange or financial authority of any sort in the city. Everything is based on trust, and so far it has worked, owing to Somalia’s tightly woven clan networks: everyone knows everyone else, so it’s less likely that an unknown con man will pull off a scam. In view of Somalia’s history, this ad hoc stock market is not as implausible as it may sound. Until a century ago, when Italy and Britain divided what is present-day Somalia into colonial fiefdoms, Somalis got along quite well without a state, relying on systems that still exist: informal codes of honor and a means of resolving disputes, even violent ones, through mediation by clan elders.

Of course, the lack of a government poses problems, especially with respect to the warlords. Sheikh and his fellow businessmen have kept them at bay by paying them protection money and by forming their own militias. Those manning the machine guns outside Telecom Somalia are employees of the company, and when the firm’s linemen go out to lay new cables (they used to string overhead lines, but those got shot up by stray gunfire), they, too, are protected by company gunmen.

All of this is costly, so the business leaders have taken steps to bring about a new government—one that will keep its hands out of their pockets and focus on providing security and public services. The process began two years ago, when Sheikh and other entrepreneurs got fed up with the blight of checkpoints, at which everyone was required to pay small tributes to armed teenagers affiliated with various warlords. The businessmen decided collectively to fund a militia to get rid of the checkpoints, resulting in an armed force that is overseen by the city’s Islamic clerics. Having succeeded in its main mission, the militia now serves as an informal sort of police force, patrolling the streets in an effort to stop petty crime.

With the checkpoints gone and the warlords weakened by the loss of a key source of income, the business elite is bankrolling a transitional government that was appointed at a peace conference last August. The government does not yet control much more than the heavily guarded buildings that are its temporary headquarters, but it has begun deploying its own policemen in some parts of the city. The businessmen are pooling their company security forces to bolster the government and are trying to lure the warlords’ gunmen to its side with cash incentives. In February one of the leading warlords, Mohamed Qanyareh, agreed to support the government in exchange for ministerial posts for himself and his allies.

If the business community succeeds in returning Mogadishu to something resembling normalcy, it will have shown that a failed state, or at least its capital city, can get back on its feet without much help from the outside world. This would constitute not an argument against outside intervention but, rather, a lesson that intervention doesn’t have to be of the UN-led, billion-dollar variety.

Before leaving the city I met with Hussein Abdullahi, a well-educated businessman who fled Mogadishu in 1991 and wound up in Toronto, driving a taxi. Three years ago, during a return visit, he was struck by the fact that his Somali friends were living better at home than he was in Canada, at the bottom of the immigrant ladder. He decided to move back and now manages a thriving pasta factory, a bread factory, and a medical clinic. Sipping an ice-cold Coke in his office, Abdullahi offered to share a secret that, he promised, could make me rich. A chubby man with a beatific smile, he leaned forward conspiratorially.

“Everything is possible in Mogadishu now, everything,” he said. “If you have the money and the knowledge, you can do whatever you want. It is virgin here.”

Perhaps so, but only in the way of scorched earth.

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